Inconsistent address data could delay Medicare payments

One health system reviewing its billing addresses in the Medicare enrollment system found addresses were missing for new facilities. Another found addresses still listed for a demolished facility.

Such issues could result in denied and delayed Medicare payments starting in July, when Medicare administrative contractors (MACs) will be required for the first time to tie payments to correct addresses for off-campus hospital outpatient departments (HOPDs).

Previously scheduled to begin April 1, the edit to Medicare’s claims-processing requirements was delayed until July after national testing found “many providers are not sending the correct exact service facility location on the claim that produces an exact match with the Medicare enrolled location as based on the information entered into the PECOS [Provider Enrollment, Chain, and Ownership System] for their off-campus provider departments,” according to a Medicare notice.

And small address differences can be critical. The Centers for Medicare & Medicaid Services (CMS) identified discrepancies involving the use of “Road” versus “Rd” or “Rd.” and “Suite” versus “STE.” Such differences will result in the return of claims.

Generally, “all of those are correct, and the post office gets it here,” said Tim Fry, JD, an attorney for McGuireWoods. “Well, that’s no longer going to be good enough” for CMS.

Industry advisers said in interviews this week that many hospitals and health systems still have not updated and matched their Medicare-enrollment and billing information, which leaves them vulnerable to extensive payment delays when MACs return such claims for correction.

“It’s very common to have out-of-date enrollment information out there,” said Dave Snow, JD, an attorney at Hall Render who has helped hospitals meet the new address requirements. “They don’t necessarily get in much trouble for it — until now, when this kicks in.” 

One of Snow’s hospital clients found its Medicare enrollment file contained address information for a building it demolished two years earlier. Officials at the hospital found several HOPD locations were never added to the system.

“Most hospitals and health systems, if they look, would find that there was something that wasn’t an exact match,” said Claire Turcotte, JD, an attorney for Bricker & Eckler. “Every hospital that bills Medicare would have to spend some time auditing to make sure that they had an exact match and they weren’t going to have claims denied.”

How to ensure compliance

Steps to address the issue include:

• Listing on the CMS-855A enrollment form every off-campus HOPD location where the hospital provides services
• Ensuring those locations are in the hospital’s PECOS enrollment file
• Matching the address listed in PECOS with the service facility location in Medicare claims
• Ensuring billing staff are aware of address-listing protocols

Optimally, meeting the address requirements will not necessitate changes to the 855 form, given that providers may need significant time both to change their information on the form and to gain approval for those changes from CMS, said Amanda Roenius, JD, an attorney for McGuireWoods.

“What we’re hoping is that it is going to [involve] updating the claims they send in, making sure that their claims match enrollment information that has already been provided to CMS,” Roenius said.

Reasons for the new requirement

The new focus on correct address listings stems from the Bipartisan Budget Act of 2015, which created varying HOPD payment levels based on service start dates. As a result, CMS required hospitals to identify nonexcepted items and services provided at HOPDs. Additionally, off-campus HOPDs were required to report a modifier for all excepted items and services furnished in such locations. CMS uses the reporting to identify all off-campus HOPDs where services are being furnished and to confirm correct use of the modifiers and correct payment.

“They’re trying to ensure records are correct so that they pay the higher outpatient rates only at the locations that qualify. That’s part of what this is about,” Turcotte said.

Attorneys noted that CMS is seeking this degree of specificity with the validation edits because even different suites of the same building will be treated as distinct facility locations under the recent billing rules.

The likely effect on hospital operations and workflow

The new requirement means Medicare will reject claims without an exact match between the information on the hospital’s 855A form (and appearing in PECOS) and the off-campus HOPD service facility location reported on the hospital’s Medicare Outpatient Prospective Payment System claims.

The amount of time, money and resources required from hospitals because of the update is expected to vary widely based on the accuracy of previous record keeping and the extent to which a hospital has shuffled locations and facilities.

“For many years, hospitals were kind of lax in updating that information because CMS wasn’t tracking off-campus locations, specifically, until a few years ago,” Turcotte said. “If someone at the health system hasn’t been maintaining those records and didn’t start cleaning them up in 2015, there could be quite a bit of work to do because some larger systems have hundreds if not thousands of these locations.”

In addition to facing delays on Medicare claims that are returned for address corrections, providers will receive no payment if they exceed CMS time limits for refiling claims.

“It’s going to create a cash flow crunch if you wait” to tackle the address issue, Fry said.

The address requirement specifically applies to fee-for-service Medicare, but Medicare Advantage plans could add a similar rule, attorneys said.

CMS plans another round of national testing in June to check for address accuracy, but there’s no indication another implementation delay is imminent, Fry said.